Insider Dealings in Nigeria

In this paper the main focus will be on the clause of 'Liability to contemporaneous traders for insider trading' which is section 20A in the Securities Exchange Act of 1934. The paper will start off by giving some basic points that make up this section followed by the history and background of the Securities Exchange Act of 1934. The paper will then highlight the major impact that this act has made on the industry in the current global standing. Some of the basic points that make up the subsection 20A clauses include the following:

Lastly, for the portion of domestic antitrust, we will examine the Sarbanes Oxley Act. Enacted in 2002 it increases transparency in accounting. It was designed to prevent accounting errors and fraud in financial disclosures. The SOX act stipulates that the periodic financial reports be carried out in a certain way. The signing officers must review and certify the report prior to release. They are required to make sure all information is clear, true, not misleading and does not omit any important details. The signing officers are also required to evaluate the internal controls and their effectiveness within ninety days of the report. If there are any areas of internal control that are not working or may have issues they must also report this, along with any responsible employees. Finally, they must make sure the financial picture is being fairly portrayed through all of this.

5. Section 1043 prohibits insider trading by any person to deal with shares or to use, or engage with

Lipton, P. & Herzberg, A. (2010). Understanding Company Law. (15th ed.). Pyrmont, NSW: Lawbook Co.

In many misfeasance cases against directors, those breaches maybe relatively uncontroversial. This draws into focus the question of whether the director has any common law or statutory defence, including the Duomatic principle and ratification by shareholders (CA 2006 S.239), available to a claim against him for restitution to the company. S.239(6)(a) preserves the Duomatic rule that if an informal unanimous consent is reached among voting shareholders, it is unnecessary to pass such ratification resolution through general meeting or written resolution. The first part will examine the scope and requirements of this rule to illustrate the validity of such assent. S.239(7) leaves the door open for rules of law, which refers to common law principles, to continue guiding ratification. It will be assessed how these rules impose limitations on the general ratification power conferred by s.239.

Section 105 gives PCAOB authority to conduct investigations and obtain all relevant information. PCAOB also has the power to suspend auditors, revoke the registration of the accounting firms and impose penalties for violations or unwilling to corporate with an investigation (Philipp, CPA, & CGMA, 2014). Section 106 regulates foreign public accounting firms providing an audit report to an issuer and requires them to comply with PCAOB requests (Philipp, CPA, & CGMA, 2014). Section 107 gives SEC oversight and enforcement authority over the PCAOB and its decisions (Philipp, CPA, & CGMA, 2014). This prevents PCAOB from gaining too much power over accounting regulation. Section 108 amends the Securities Act of 1933 to allow the SEC to have the authority to establish accounting standards, to adopt accounting standards established by a standard setting body that meets certain qualifications, such as the FASB. Section 109 calls for funding of the PCAOB and the designated accounting standard-setting body (FASB) to be funded from fees imposed upon public companies (Philipp, CPA, & CGMA,

This is called insider trading and is one of the acts that the SEC is responsible for stopping. One of the most famous cases occurred in late 2001 in which one of America’s most famous woman was arrested. This person was Martha Stewart someone who everyone in America has seen on T.V. countless times. Stewart who owned four thousand shares of ImClone stock was imprisoned for five months after being found guilty of insider trading by the SEC. The C.E.O of the company ImClone, Sam Waksal was found to be the main culprit in the case. Waksal discovered that his company would be taking a huge hit in the stock market. The C.E.O urged his broker to sell the stock because if he were too keep it would have lost hundreds of thousands of dollars. When asking his broker to dump the stock a natural instinct took over and the broker knew that something was going to happen to the company forcing its stock to drop. Waksal and Stewart however shared the same broker, when the news was conveyed to the broker Martha was urged to sell her stocks. After she did the SEC charged her with insider trading for selling her stock with illegal information. Even though Martha did not directly receive the information she still used critical information that was only available to a select few in her favor. This forced the SEC to carry out its purpose and maintain fair, orderly, and efficient

In addition to the thorough explanation about the fundamental concepts of insider dealings, the law also provides detailed statements about some common scenarios of insider dealings which are not regarded as market misconduct, interest in securities, penalties and general defenses.

Certain proclamations in this press discharge may be advance looking in nature or "forward looking articulations" as characterized in the Private Securities Litigation Reform Act of 1995. The forward looking comments held in this press discharge are liable to various dangers, patterns and questionable matters that could cause true execution to contrast tangibly from these forward looking articulations. Various those dangers, patterns and questionable matters are talked over in every organization's Sec

After that, he explains how Congress adopted the Sarbanes-Oxley Act of 2002, the New York Stock Exchange (NYSE) and Nasdaq adopted comprehensive new corporate governance rules regarding disclosure, and the Securities and Exchange Commission (SEC) adopted a requirement obligating chief executive officers (CEOs) and chief financial officers (CFOs) to certify that their financial statements and reports were accurate and not misleading, with possible criminal charges if their numbers turned out to be bogus (Brountas, 2004, Ch. 1, Legislative & Regulatory Corrective Action). He acknowledges that there are critics to the new laws, rules and penalties, but stands firm on his position that the laws have helped to restrain and will eventually eliminate the recent corporate corruption that financially crushed trusting investors (Ch. 1, The Sarbanes-Oxley Road Map).

These standards are conveyed to the staff on a normal basis. Insider trading guidelines have been established to ascertain that unpublished price sensitive information about the bank or any other company cannot be misused under any situation

| * David should not disclose confidential information outside the firm. * If he seeks advice from his friend Peter, he will breach S140.1 & S140.5. * Peter can trade this information to benefit him – affecting MAL.

Insider trading refers to the trading of a listed company’s stock or other financial securities by individuals who has access to non-public material information about the company. This action often occurs within employees/ex-employees of the listen company. Information is considered to be non-public material information if making it public would affect the price of securities, and using such information in decisions to buy or sell financial securities would be unfair to non-insiders (Bainbridge, 2013). Insider trading is treated as a mischief in more than 90 countries, and defendants are imposed with penalties (Beny, 2012). Specific insider conduct regulations in New Zealand were first enacted in 1988, followed by amendments in 2002, 2006 and 2008. The insider conduct regimes between 1988 and 2008 are often considered as a failure due to weak enforcements. Thus in 2008, the regulator introduced a new regime, which was a close model to the Australian insider conduct legislation. Both regimes are expansive, meaning it could be applied to any person in possession of insider information. However, while the Australian laws were aggressively enforced (more than 26 prosecutions were brought since then), no prosecutions have been launched under the new legislation in New Zealand. In addition, New Zealand also had no convictions secured prior to 2008, illustrating a clear enforcement deficit in the New Zealand

There has been a number of banking reforms in Nigeria with varying attendant effects. However, the effect of the current reform originating from the conspicuous effect of the economic meltdown has become of great concern. While the reform of 2004 cannot be exonerated from its attendant casualties of job loss among others, the current reforms seems to have raised some dust. Following the financial stringencies in the economy and the role of banks in a depressed economy, the CBN governor, Mallam Sanusi Lamido Sanusi, on August 14, 2009 relieved some banks’ CEOs of their duties for wrong exercise of executive responsibility.

11. The problem of stock market relates to the degree of access,which investors have in buying ,and selling of stocks in such a market. The more liquid in the stock market is the more the investors will be interested in trading in the market. The lack of adequate number of investors in the Nigerian stock market is a reflection of problem of liquidity in the market. At an average ratio of 2 percent per year,the turn-over ration, a measure of the value of share traded relative to local market capitalization is very low in Nigeria compared with 100 percent,9.0 percent and 4.6 percent in Botswana,Zimbabwe, and Mauritania respectively. The low trading activities are also a result of the ownership structure. Until 1995, when the Nigerian investment Promotion Commission Decree 16 and the Foreign Exchange ( Monitoring and Miscellaneous) provisions Decree 17 were promulgated to replace the Nigerian Enterprises Promotion Decree of 1989 and Exchange Control Act of